Fei Dai

Fei Dai from TF Securities asked about the faster sales and profitability ramp-up of the Zhengzhou superstore compared to Wuhan, seeking insights into the initiatives driving this outperformance and the expected time for new superstores to reach stable operations. Additionally, Fei Dai requested a comparison between Uxin's business model and that of Carvana, a U.S. used car company.

Answer

Dai Kun, Founder and CEO of Uxin, attributed Zhengzhou's accelerated performance to lessons learned from Wuhan, leading to smoother operations and improved data-driven pricing for new regions. He stated that new 3,000-vehicle superstores are expected to break even in about nine months, with full maturity in 18-24 months. Comparing Uxin to Carvana, Dai Kun highlighted differences in sales channels (Uxin's 70% offline vs. Carvana's online-only, reflecting market differences) and similarities in the own-inventory model, focus on precise pricing, and commitment to customer satisfaction (Uxin's NPS 67 vs. Carvana's >80). He expressed confidence in Uxin reaching Carvana's current sales scale within 4-5 years.

Fei Dai with TF Securities asked about the key initiatives driving the Zhengzhou superstore's faster sales and profitability ramp-up compared to Wuhan, and the expected timeline for newly opened superstores to reach stable operations. Fei Dai also inquired about the key similarities and differences between Uxin's business model and Carvana's.

Answer

Founder and CEO Dai Kun attributed Zhengzhou's outperformance to lessons learned from the Wuhan superstore, leading to smoother operations, and improved data-driven pricing capabilities. He expects new superstores to reach break-even in about nine months and achieve mature, stable sales volume and profitability with planned inventory capacity in 18 to 24 months. Regarding Carvana, Dai Kun identified the primary difference as the sales channel (Carvana online, Uxin primarily offline superstores with online contribution). Similarities include an own inventory model with large-scale reconditioning, a focus on precise pricing using transaction data, and a strong emphasis on customer satisfaction and brand reputation (Uxin's NPS of 67). Dai Kun expressed confidence in Uxin sustaining over 100% year-over-year sales growth and reaching Carvana's current sales volume within four to five years.

Fei Dai of TF Securities inquired about Uxin's strategy for balancing short-term profitability pressures with its rapid superstore expansion needs and whether additional financing would be required.

Answer

CFO Feng Lin explained that Uxin plans new superstores meticulously, leveraging digital management and operational efficiency to reduce early-stage costs and accelerate breakeven. She noted that each new superstore requires $8-10 million, primarily for inventory, and typically takes 2-3 years to reach maturity. While mature stores can self-fund new launches, Uxin anticipates needing incremental equity financing over the next 2-3 years to support its rapid expansion, but is confident in securing funds given strong growth and capital market recovery.

Fei Dai asked about Uxin's strategy for balancing short-term profitability pressures with its rapid superstore expansion needs and whether additional financing would be required.

Answer

CEO Kun Dai explained that Uxin carefully plans each new superstore to avoid blind expansion, focusing on standardization, digital management systems, and improved organizational efficiency to reduce early-stage costs and accelerate time to breakeven. He noted that new superstores require $8-10 million, primarily for inventory, and typically take 2-3 years to reach maturity and profitability. Kun Dai stated that Uxin plans to rely on measured incremental equity financing over the next 2-3 years to support rapid expansion, expressing confidence in raising sufficient capital given the company's consistent 100%+ year-over-year growth and signs of capital market recovery.

Fei Dai of TF Securities asked about Uxin's strategy for balancing short-term profitability pressures with its rapid superstore expansion needs and whether additional financing would be required.

Answer

Kun Dai, CEO of Uxin, explained that expansion is strategically planned, not blind, with a focus on standardization and digital systems to mitigate early-stage cost pressure. He noted that a new superstore requires approximately $8-$10 million, primarily for inventory, and typically takes two to three years to reach breakeven. He confirmed plans for measured incremental equity financing over the next two to three years to support rapid expansion, expressing confidence in securing sufficient capital.

Asked about the impact of the recent price wars in China's new car market on the company's used car business.

Answer

The company stated the impact is manageable due to their mature playbook, which includes dynamic pricing to maintain competitiveness, active management of inventory mix to reduce exposure to sensitive models, and the belief that the price war is a short-term situation concentrated in the NEV segment.

The analyst asked for details on the new stores in Zhengzhou and Wuhan, including the timeline to profitability and the financial impact in 2025. They also questioned the company's strategy for setting inventory limits based on demand and how it balances inventory levels with turnover rates.

Answer

The executives detailed the opening timeline for the new stores (Wuhan in H1 2025, Zhengzhou in H2 2025) and projected a 6-12 month period to reach breakeven. They explained that inventory levels are planned based on local car ownership and a target market share of over 20%. Despite increasing inventory, sales growth has been stronger, leading to accelerated turnover, and the company aims to maintain a 30-day turnover rate.